Shipments of PC and TV panels could plunge by around 30 percent in this quarter from 20.7 million units shipped in the third quarter. In late October, AU Optronics had said it expected a drop between 5 percent and 9 percent.

“Based on our information and market conditions, the previous analysis on Oct. 23, 2008, is not applicable,” AU Optronics said in a statement yesterday.

Average panel prices may fall by 25 percent quarter on quarter, the Hsinchu-based company said, revising its earlier forecast of 13 percent.

To cope with stagnant demand, the company said it could reduce its manufacturing to 60 percent of capacity in the final quarter of the year from 70 percent projected in October.

“The revision indicates that market demand is obviously far worse than most people had expected, since panel makers are eager to clean up inventories at prices much lower than cost,” said Jeff Pu (蒲得宇), a flat-panel industry analyst with Yuanta Securities Co (元大證券).

Chi Mei Optoelectronics Corp (奇美電子), the nation’s No. 2 flat-panel maker, followed suit by forecasting a bigger-than-expected quarterly decline in TV and PC panel shipments in the fourth-quarter, citing slowing demand. The Tainan-based panel maker predicted a drop of between 35 percent and 40 percent, up from its forecast of 10 percent to 15 percent more than a month ago.

Meanwhile, AU Optronics and Chi Mei yesterday posted NT$17.75 billion and NT$12.23 billion respectively in sales for last month, down 67 and percent 66 percent from a year earlier, while both firms said PC and TV shipments fell about 30 percent month-on-month.

Pu expected AU Optronics' fourth-quarter losses to be bigger than hisforecast of NT$12 billion two weeks ago. Chi Mei could see quarterlylosses widen to more than NT$16 billion this quarter.

Battered by the sluggish economy, small panel maker HannStar Display Corp (瀚宇彩晶) said yesterday it was considering shutting down its production of panels for PC monitors next month after equipment loading plunged to 50 percent and sales dipped to a four-year low at NT$2 billion last month.

Panels for PC monitors accounted for 95 percent of the company’s revenues in the third quarter, but HannStar is shifting production to make small panels for consumer electronics.

Shares of AU Optronics and Chi Mei rebounded by 6.8 percent and 6 percent respectively to NT$21.2 and NT$9.54 yesterday, but still represented a drop of 65 percent and 78 percent since the beginning of the year.

In the first half of this month, average prices of panels for PCs and TVs dropped another 5 percent to 10 percent from two weeks ago as demand remained weak, Taipei-based market researcher WitsView said yesterday.

WitsView is an LCD panel market researching division of local research house DRAMeXchange Technology Inc (集邦科技).

“As the pressure from falling into deeper losses mounts, panel makers are forced to sell products at prices lower than manufacturing costs to generate cash,” WitsView said in a report yesterday.

The price of 37-inch LCD TV panels slid the most, by 10 percent to US$270 on average per unit in the first half of the month from two weeks ago.

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